Dear Seniors,
I am new to this forum and also to HR in India, so I am hoping to get your expert advice to help me understand more about this. Currently, I am working in a company in Singapore. We are expanding our business in India, so I am tasked to handle overall HR there. I was wondering if you could advise me on where to start.
I have some staff who have already started work as contractors. We wanted to give them full-time employment, but they insisted on getting a 10-month renewable contract as, according to them, this will provide them with some kind of taxation relief. Could you please help me understand how this works and if there will be any implications if we give them a 10-month contract and renew it with a 1-day break in service? I have scratched my head trying to figure things out but failed.
I would appreciate it if someone could help me and shed some light on this matter.
Thank you all.
Regards,
Shelly
From Singapore, Singapore
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I am new to this forum and also to HR in India, so I am hoping to get your expert advice to help me understand more about this. Currently, I am working in a company in Singapore. We are expanding our business in India, so I am tasked to handle overall HR there. I was wondering if you could advise me on where to start.
I have some staff who have already started work as contractors. We wanted to give them full-time employment, but they insisted on getting a 10-month renewable contract as, according to them, this will provide them with some kind of taxation relief. Could you please help me understand how this works and if there will be any implications if we give them a 10-month contract and renew it with a 1-day break in service? I have scratched my head trying to figure things out but failed.
I would appreciate it if someone could help me and shed some light on this matter.
Thank you all.
Regards,
Shelly
From Singapore, Singapore
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Dear Shelly ji,
Welcome to this forum where we enhance our knowledge by sharing and interacting. I feel you need the services of a person like me on a retainer basis as an advisor in labor law compliance, liaisoning, outsourcing, etc. In this forum, you can get answers to specific queries by you, but not on the entire facts of the law. Law is a very vast subject, as you know. In law, each word has a different meaning, interpretation, and implication. The meaning of working as a contractor is different in law than what you understood. Each concept you need to understand in the proper way.
Hope you understand it. All the best.
From India, Mumbai
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2584Welcome to this forum where we enhance our knowledge by sharing and interacting. I feel you need the services of a person like me on a retainer basis as an advisor in labor law compliance, liaisoning, outsourcing, etc. In this forum, you can get answers to specific queries by you, but not on the entire facts of the law. Law is a very vast subject, as you know. In law, each word has a different meaning, interpretation, and implication. The meaning of working as a contractor is different in law than what you understood. Each concept you need to understand in the proper way.
Hope you understand it. All the best.
From India, Mumbai
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Dear Shelly,
Congratulations on receiving such a significant responsibility from top management, as they have entrusted you to perform. You may proceed with confidence.
Coming to the point, in my opinion, Ms. Shelly, as an HR professional, you must establish your company's HR policies. As an HR manager responsible for all activities within the department, you cannot be overly flexible in adapting to employees' or contractors' needs or expectations.
Some may try to evade tax liabilities, but as a company and as an HR professional, I will not support the idea of renewing a contract after just one day of leave. While occasional instances may be acceptable and welcomed by the company, frequent and large-scale renewals (especially for contractors) could potentially create significant issues for the company in the future.
It is crucial to establish your own policies and enforce them strictly within the company. If there are concerns regarding contractors, explore other options. There are numerous contractors available who can adhere to your policies. The decision to renew contracts and their duration should be at your discretion; the company cannot solely accommodate the contractors' preferences.
Expand your search for contractors and focus on building robust policies rather than solely relying on flexibility.
I trust that you will effectively address this situation by analyzing the procedures, company needs, flexibility boundaries, and available resources. I am confident that you will demonstrate that the decisions made by top management were indeed correct.
Best Wishes.
Regards,
Manish Srivastava
H.R & ISO Consultant (QMS/EMS/FSMS)
+91-96707-66888
email: correctcertification@gmail.com
From India, Lucknow
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Congratulations on receiving such a significant responsibility from top management, as they have entrusted you to perform. You may proceed with confidence.
Coming to the point, in my opinion, Ms. Shelly, as an HR professional, you must establish your company's HR policies. As an HR manager responsible for all activities within the department, you cannot be overly flexible in adapting to employees' or contractors' needs or expectations.
Some may try to evade tax liabilities, but as a company and as an HR professional, I will not support the idea of renewing a contract after just one day of leave. While occasional instances may be acceptable and welcomed by the company, frequent and large-scale renewals (especially for contractors) could potentially create significant issues for the company in the future.
It is crucial to establish your own policies and enforce them strictly within the company. If there are concerns regarding contractors, explore other options. There are numerous contractors available who can adhere to your policies. The decision to renew contracts and their duration should be at your discretion; the company cannot solely accommodate the contractors' preferences.
Expand your search for contractors and focus on building robust policies rather than solely relying on flexibility.
I trust that you will effectively address this situation by analyzing the procedures, company needs, flexibility boundaries, and available resources. I am confident that you will demonstrate that the decisions made by top management were indeed correct.
Best Wishes.
Regards,
Manish Srivastava
H.R & ISO Consultant (QMS/EMS/FSMS)
+91-96707-66888
email: correctcertification@gmail.com
From India, Lucknow
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Dear Shelly,
First of all, welcome to India. Normally, contract or assignment-type agreements are made for a specific period. If the job warrants a regular assignment, it is unfair labor practice and also bad under the law to have such agreements with an intention to avoid granting a permanent job. But in your case, it is the employee who wants it; hence, you may agree. Yet after working for two forty days (one day or one week break is equally bad in law), they can claim regular employment.
Kannan
From India, Madras
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First of all, welcome to India. Normally, contract or assignment-type agreements are made for a specific period. If the job warrants a regular assignment, it is unfair labor practice and also bad under the law to have such agreements with an intention to avoid granting a permanent job. But in your case, it is the employee who wants it; hence, you may agree. Yet after working for two forty days (one day or one week break is equally bad in law), they can claim regular employment.
Kannan
From India, Madras
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Dear Manish,
Thank you very much for your advice, and I greatly appreciate your words of motivation. The labor laws in Singapore are quite straightforward compared to India, and in my company, we normally don't encourage making exceptions like this. However, these two individuals are handling key positions that require niche skills, so we agreed to their terms.
At the same time, we want to avoid any kind of legal trouble. I was going through some income tax exemption clauses, but I couldn't find anything related to this, so I can't figure out how they are able to evade taxes if they don't complete the full year. Their income tax will be calculated based on the total earnings in that year, and eventually, the next contract will also fall into that year. I can't see any escape... I think I need to read more about taxes these days... sigh!
Regards,
Sherry
From Singapore, Singapore
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Thank you very much for your advice, and I greatly appreciate your words of motivation. The labor laws in Singapore are quite straightforward compared to India, and in my company, we normally don't encourage making exceptions like this. However, these two individuals are handling key positions that require niche skills, so we agreed to their terms.
At the same time, we want to avoid any kind of legal trouble. I was going through some income tax exemption clauses, but I couldn't find anything related to this, so I can't figure out how they are able to evade taxes if they don't complete the full year. Their income tax will be calculated based on the total earnings in that year, and eventually, the next contract will also fall into that year. I can't see any escape... I think I need to read more about taxes these days... sigh!
Regards,
Sherry
From Singapore, Singapore
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Dear Kannan,
Thank you for your advice. The staff are not willing to take up permanent positions, but they assured us (verbally) to stay with us for 4 years on a renewable contract basis. Can we put some clause in our contract to state that they are bound by the contract for the full term? Currently, we are only offering them a 10-month contract, relying on their words... I know it's complicated and not right in any way, but we can't afford to lose them. Therefore, we have to bear with them and their unreasonable conditions.
Regards,
Shelly
From Singapore, Singapore
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Thank you for your advice. The staff are not willing to take up permanent positions, but they assured us (verbally) to stay with us for 4 years on a renewable contract basis. Can we put some clause in our contract to state that they are bound by the contract for the full term? Currently, we are only offering them a 10-month contract, relying on their words... I know it's complicated and not right in any way, but we can't afford to lose them. Therefore, we have to bear with them and their unreasonable conditions.
Regards,
Shelly
From Singapore, Singapore
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In addition to the wonderful suggestions by the respective members above, I would like to share the following links which will help you to understand the concept and basics of an HR Department and the setting up procedure:
- [How to set up HR functions for a newly started company](https://www.citehr.com/136789-how-set-up-hr-functions-newly-started.html)
- [How do I set up a new human resources department](https://www.citehr.com/108493-how-do-i-set-up-new-human.html)
- [How to set up an HR department in a new organization](https://www.citehr.com/249203-setup-hr-department-new-organisation.html)
- [How to set up a new HR department](https://www.citehr.com/65299-how-set-up-new-hr-department.html)
- [Starting up an HR department with affirmative action](https://www.citehr.com/2069-starting-up-hr-department-affirmative-action.html)
- [How to start up HR with affirmative action](https://www.citehr.com/6382-how-start-up-hr-affirmative-action.html)
From India, Gurgaon
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- [How to set up HR functions for a newly started company](https://www.citehr.com/136789-how-set-up-hr-functions-newly-started.html)
- [How do I set up a new human resources department](https://www.citehr.com/108493-how-do-i-set-up-new-human.html)
- [How to set up an HR department in a new organization](https://www.citehr.com/249203-setup-hr-department-new-organisation.html)
- [How to set up a new HR department](https://www.citehr.com/65299-how-set-up-new-hr-department.html)
- [Starting up an HR department with affirmative action](https://www.citehr.com/2069-starting-up-hr-department-affirmative-action.html)
- [How to start up HR with affirmative action](https://www.citehr.com/6382-how-start-up-hr-affirmative-action.html)
From India, Gurgaon
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Dear Sherry,
You are welcome anytime if I can help you out at any point.
I put myself in your place for a while and assumed the kind of pressure you might be facing at this time. It is indeed tough when you have to rely on others' words to retain such important individuals under their own conditions. The reality is that life must go on, as you do not have other options but to continue with their conditions.
I still suggest that if you can establish a judicial bond to ensure they do not leave your company for the next four years, it would be the best deal from your side. It's challenging, but any type of written agreement, official or unofficial, with one or two important witnesses will demonstrate your competency and long-term vision approach while fulfilling your role and responsibility.
There are always hidden ways to find a solution. They might be small, but they could lead you out if you reassess the options.
I hope your next reply will inform us that you have resolved this problem at your own level and under your own conditions.
Eager to hear from you soon.
Best Wishes,
Manish Srivastava
+91-96707-66888
From India, Lucknow
Acknowledge(0)Amend(0)
You are welcome anytime if I can help you out at any point.
I put myself in your place for a while and assumed the kind of pressure you might be facing at this time. It is indeed tough when you have to rely on others' words to retain such important individuals under their own conditions. The reality is that life must go on, as you do not have other options but to continue with their conditions.
I still suggest that if you can establish a judicial bond to ensure they do not leave your company for the next four years, it would be the best deal from your side. It's challenging, but any type of written agreement, official or unofficial, with one or two important witnesses will demonstrate your competency and long-term vision approach while fulfilling your role and responsibility.
There are always hidden ways to find a solution. They might be small, but they could lead you out if you reassess the options.
I hope your next reply will inform us that you have resolved this problem at your own level and under your own conditions.
Eager to hear from you soon.
Best Wishes,
Manish Srivastava
+91-96707-66888
From India, Lucknow
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DEAR ALL. Pls. Help me . .i am planning to resiGn oN my work nOw i already emaileD them my formal resiGnatioN letTer buT they are nOt replying it 2days ago since i emaileD my agency ..i am asking for advice to alL if it wilL be ok to leave my work withouT their reply or do i neED TO Wait for their reply. .thankyou and godblesS.
From Philippines, Olongapo City
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From Philippines, Olongapo City
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Aligning HR Policies to Business Objectives.ppt
HR policies & procedures May 2007.pdf
Index of HR Policies.docx